VDIM8050 - How to inhibit, amend or withdraw interest: Amending interest after an assessment has been processed

This guidance deals with interest matters in respect of prescribed accounting periods starting on or before 31 December 2022. Interest matters with effect from 01 January 2023 are dealt with under Finance Act 2009.

Please see Compliance Handbook page CH140000 onwards to find the new interest rules guidance.

If after an assessment has been processed the amount of interest charged needs to be withdrawn, reduced or (exceptionally) increased, form VAT663 should be used in these circumstances, see VDIM6000.

The VAT 663 can be used to cancel a minimum of one day and maximum of all the days upon which interest was charged. If you need to use the VAT663, only do so after any action needed due to misappropriation of a remittance has been taken.

It is good practice to always keep an audit trail when using the VAT663. This should include VISION prints of the Officer’s Assessment before VAT663 action is taken (including the Interest Calculation Record ICR for the assessment) and details about its preparation. The audit trail should be captured to the taxpayer’s Electronic Folder (EF).